Denver’s Department of Excise and Licenses accepted a settlement agreement between the city attorney’s office and a former marijuana business whose owner allegedly sold the product illegally. 

The agreement states that the marijuana infused products manufacturer license for Colorado General Service Provider (CGSP) that expired in July will not renewed and any marijuana businesses, corporation or entity associated to its owner David Sermos will be denied a license in the future. 

“It’s a rare occurrence when Denver has to take action to revoke a marijuana license because of unlawful activity, Excise and Licenses Executive Director Ashley Kilroy said in a statement.

“We hold all businesses that violate the law accountable and enforce our strong rules and regulations so Denver continues to have one of the most successfully regulated cannabis markets in the world, with public safety always our top priority.”

Since 2018, the Department of Excise and Licenses had revoked 37 license prior to CGSP. There are currently 926 active marijuana licenses throughout Denver, said Eric Escudero, the department’s director of communication in an email statement. 

Sermos, the owner of CGSP,  was arrested on March 13, 2020, after an investigation by the Denver Police Department that began after officials said he was purchasing marijuana, but not registering any sales to the state. 

According to the complaint filed by Excise and Licenses, during the investigation by DPD, Sermos was seen purchasing large quantities of marijuana, but before returning to his businesses, would stop at his home. This is not allowed as transport with product must be between licensed entities only.

Authorities witnessed Sermos allegedly placing a large trash bag into his car following a purchase of 60 pounds of marijuana and then arrested him for the associated crimes. 

Sermos later admitted to DPD that he had been selling the marijuana for profit of $25,000 per pound. He also admitted he had been selling the product illegally since December 2019, according to the criminal complaint.

As of the result of the investigation CSGP and Sermos were issued a Show Cause Order by the department for allegedly violating several of the state’s regulation on marijuana on Aug. 31, 2020.